Friday’s Headlines

Lets start with the sacking of the Chancellor Kwasi Kwarteng.

His introduction to Govt was a mini budget and instantly sent the GBP & markets into turmoil.

Friday 14th October it was Kwasi Kwarteng’s marching orders. Within an hour in came Jeremy Hunt, a well respected Tory but with no qualifications for the role of Chancellor.

USD Rampant

As I stated in my previous email, if the DXY holds 112 expect the next impulse higher.

That’s exactly what we’ve seen today.

I expect 115 to be tested very soon, meaning keep buying USD on corrections.

See the image below

DXY Image above

Daily Chart on the left, highlights the start of each new impulse move higher with green arrow.

The hourly chart on the right shows a double bottom, followed a break of the neckline. This shows a new trend starting on the smaller timeframe.

Perfect time to be buying USD.

A strong USD also puts pressure on equities.

Although the news out of the US today was pretty much as expected, the USD had found a bid.

Taking a look at the Nasdaq image below:

NAS100

Daily chart on the left:

The red arrows highlight the start of the next daily impulse lower. Will we continue to see this market slide ?

H1 on the right:

10750 is shown as a major support level and yesterdays blip below could have been a market shakeout / Stop hunt.

If we see a break and close below then I will remain short bias.

A move above 11,200 then I will be looking to trade the next rally even though I see it as a bear rally.

Have a great weekend.

Mark Owen

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